Bill Overview
Title: Restaurant Revitalization Tax Credit Act
Description: This bill allows certain restaurants affected by the COVID-19 pandemic a credit against payroll tax liability up to 100% of the wages paid to their employees, not to exceed $25,000 in any calendar quarter.
Sponsors: Rep. Blumenauer, Earl [D-OR-3]
Target Audience
Population: People working in the restaurant industry affected by COVID-19 pandemic
Estimated Size: 15000000
- The bill targets restaurants affected by the COVID-19 pandemic.
- After the pandemic, many countries saw a slump in the restaurant industry, impacting millions who work in this sector.
- The target population includes employees and proprietors of such restaurants.
- Globally, the restaurant industry is massive, engaging millions of employees including chefs, waitstaff, management staff, and ancillary services.
- The pandemic's impact was global, thus the target population includes restaurants worldwide that faced similar challenges.
Reasoning
- The policy aims to boost the restaurant industry, which was one of the hardest hit during the COVID-19 pandemic.
- Our simulations should include a diverse range of workers within the industry to capture various levels of impact.
- We need to consider the distribution of small vs large restaurants and how the policy benefits them differently.
- Given the budget constraints, not all affected restaurants will receive maximum benefit, thus some may see 'low' impact while others 'high'.
- We included individuals not as heavily affected by the pandemic to represent the varying levels of distress in the industry.
Simulated Interviews
Restaurant Owner (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- This tax credit could be a lifeline for my restaurant
- It's tough competing with larger chains that can recover faster
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Chef (Austin, TX)
Age: 30 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 5/20
Statement of Opinion:
- I'm hopeful this will stabilize my job
- The restaurant might be able to call back some staff
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Restaurant Manager (Los Angeles, CA)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 4/20
Statement of Opinion:
- Financial relief is always beneficial
- This credit could help us expand our workforce
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Waiter (Chicago, IL)
Age: 28 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 2.0 years
Commonness: 7/20
Statement of Opinion:
- If it helps restaurants, maybe my job will come back
- Been tough to find stable work
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Seafood Distributor (Miami, FL)
Age: 62 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- Could indirectly improve my business as more restaurants recover
- Unsure how many restaurants will actually benefit
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Barista (Seattle, WA)
Age: 22 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- This could help my boss afford more staff or better hours
- Unsure if cafes will see much benefit
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 6 | 6 |
Pastry Chef (Denver, CO)
Age: 35 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 3.0 years
Commonness: 3/20
Statement of Opinion:
- A credit might encourage hiring staff more quickly
- Skeptical if the help will reach us soon enough
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Sous Chef (San Francisco, CA)
Age: 40 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 4/20
Statement of Opinion:
- Tax credit can help with retaining staff
- Hard to say if it'll affect my personal pay initially
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Restaurant Owner (Portland, OR)
Age: 48 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 2/20
Statement of Opinion:
- Every bit of help counts
- This might help decide when to expand back to full-service
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Catering Manager (Boston, MA)
Age: 55 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 6/20
Statement of Opinion:
- Some clients own restaurants, so this could strengthen our contracts
- Hope it covers small and large operations equitably
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Cost Estimates
Year 1: $1200000000 (Low: $1000000000, High: $1500000000)
Year 2: $1200000000 (Low: $1000000000, High: $1500000000)
Year 3: $1200000000 (Low: $1000000000, High: $1500000000)
Year 5: $1200000000 (Low: $900000000, High: $1600000000)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The longevity and recovery trajectory of the restaurant industry post-pandemic may influence the actual uptake of the tax credit.
- Economic conditions more broadly, including consumer behavior changes and inflation rates, can affect the estimates.
- Potential administrative challenges in processing and verifying eligibility for the credit.